EU should focus on top 5 tech companies, says leading MEP

The EU lawmaker who will steer the EU’s flagship tech regulation through the European parliament has said it should focus on the largest five US tech companies.

Andreas Schwab, a German MEP and longtime critic of Google, spoke after France and Germany both called for the EU to be tougher on Big Tech. He said Google, Apple, Amazon, Facebook and Microsoft, were the “biggest problems” for EU competition policy.

“Let’s focus first on the biggest problems, on the biggest bottlenecks. Let’s go down the line — one, two, three, four, five — and maybe six with Alibaba,” he said to the Financial Times.

“But let’s not start with number 7 to include a European gatekeeper just to please [US president Joe] Biden,” he added.

The EU defines “gatekeeper” companies as those which span several countries, have a significant impact on the market, and link large numbers of users to large numbers of businesses.

His position is likely to be seen as anti-American, at a time when the EU is focusing on rebuilding transatlantic ties.

Schwab is also a part of the EPP, a powerful political alliance whose members include the German chancellor Angela Merkel and Ursula von der Leyen, the president of the European Commission.

Last December Brussels unveiled its plan to tackle the market power of Big Tech. The new regulations outlined revenues and market share thresholds that would define up to 20 companies as “gatekeepers”, including companies headquartered in the EU, such as Booking.com.

But in a new report, which is set to be published on Monday, Schwab called for higher thresholds of €100bn market capitalisation, rather than €65bn in the original proposals, and of €10bn turnover in the last three financial years, rather than €6.5bn.

He also defined a gatekeeper as a company that offers “two or more core platform services”, meaning platforms such as Booking, which mostly offer one service, would not fall within the scope.

“The scope of the [Digital Markets Act] should be clearly targeted to those companies, which play an unquestionable role as gatekeeper due to their size and their impact on the internal market,” the report said.

Separately, Schwab said large online platforms should be forced to be more transparent about the ways they make money from online advertising. He said the business model was a “big black hole”, adding that transparency was key to foster competition in the continent.

His report, while not binding, has been widely anticipated in Brussels because it is seen as setting the tone for months of tough debates over the Digital Markets Act.

Last week, France, Germany and the Netherlands called on the European Commission to enact even harsher rules against Big Tech to prevent them from acquiring small companies to kill competition.

Daily newsletter

#techFT brings you news, comment and analysis on the big companies, technologies and issues shaping this fastest moving of sectors from specialists based around the world. Click here to get #techFT in your inbox.